Elliot Wave Calls the Top... Again

M

mBear

How high can the S&P Go? is the title of another thread on ET. Everyone wants to know, because once it happens, we can switch from buy the dips to sell the rallies as the dominant trading mode.

Well Prechter and his guys over at elliottwave.com have their semiannual free week going and they are calling the top of the bull market rally ... again. They claim that Nov 7th was the Dow high and Nov 14th was the S&P high. That's it, rally over, lights out, all downside and heartbreak from here.

Except, wait a minute. During the last free week in May, they said the high was in at Dow 8743 and it was all downside from here, heartache, pain, etc.

Marty Schwartz said in "Pit Bull" that while Prechter was the guru de jour in the 80's by predicting the bull market, the crash of 87 turned Prechter into a perma-bear and he called for the market to top all during the 90's. So when EWI tells you they predicted the top in early 2000, well the saying "even a broken clock is right twice a day" seems to apply. (BTW if you get the idea from my nickname that I'm a perma-bear, my other nickname is mBull.)

Oh yeah, the ewi guys were using the fibs for S&P and Dow cash to make their projections for the top here. Numbers that weren't quite hit in either the S&P (1,068) or the Dow (10,012) and yet, they have now abandoned those projections to say the top is in.

So here we go again - was that the top or is there more upside before a huge collapse down to those mega-bearish projections you keep hearing?
 
Looks like the usual response to one of my threads on et - a collective yawn. Over 120 read the post, only 10 have enough balls to even participate in an anonymous poll. Where are all those discretionary traders that "trade what they think?"

And of course no one posts with an opinion on the subject. Elliot wave - yawn. Market top? - yawn. Markets and trading - yawn. Hmm, lemme guess - you just visited accidentally - were actually trying to find a porn site.
 
Stocks are the most over valued ASSet class known to man. Try selling a profitable family run business (dry cleaners, ect.) for even 4x earnings. Yet this POS trades at 20-30x. I've seen the future...and it's got the price action of GE.
 
Quote from Pabst:

Stocks are the most over valued ASSet class known to man. Try selling a profitable family run business (dry cleaners, ect.) for even 4x earnings. Yet this POS trades at 20-30x. I've seen the future...and it's got the price action of GE.
More...

Interesting observation. Typically, a business such as a dry cleaner doesn't have the scalability and growth potential of one that is listed on a major exchange (exceptions notwithstanding).

If the dry cleaner were managed and geared for national or worldwide expansion, or perhaps listed among its assets some unique and valuable proprietary property, one would indeed see that added value priced in.
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re: Prechter, et al: "A stopped clock is right twice a day."
 
Prechter SUCKS. he was calling top forever and ever and ever. permabear sucka. Although I do know there's people making moneta with EQ, but there's also people making $ with astrology so hey.
 
my remark about "Prechter, et al."

I think the Elliot Wave principal is fascinating and useful. I am fairly convinced, too, that Bob Prechter has more intelligence in the nail of his pinky than I do in my whole head.

My point was not that his stuff isn't worthwhile (he did nail the bull market of the '80's), only that, if you holler 'crash' long enough, and the market does crash, you will have been accurate.

Noone's asked but if we get through 11-12k and hold then 18k is a sprint and 22k - 25k is a marathon.
 
Prechter is missing something. He had a book out in the mid 90's that I bought in 1996. It was fascinating, all sorts of waves and charts and graphs, then I noticed that he was calling for a huge crash that would take down all of western civilization in 1995, and still selling the damned book a year later!! Then more recently he came out with another book predicting something similar I guess, never read it personally. He got on the Art Bell show and his book was an Amazon best seller for a little while!! Hell of a book salesman, that is what I would say about him. His wave theory was correct in the 80's but that was the last time. It was pretty easy to predict the bull market starting in the 80's, congress passed the law that started the 401k ball rolling, doesn't take a genius to figure out that if EVERYBODY starts buying STOCKS the prices just might go up. Attributing it to some wave garbage is likely imaginary.
 
Maybe Prechter's prediction needs a little more time to come true. I have read Prechter's "Conquer the Crash" and I think Elliot Wave Theory has validity. Predictive value, although seemingly difficult to time. I think anyone familiar with EW will agree with me. However, I am a short term trader and I don't use EW to make trading decisions. It's just something I like to be aware of.
 
mBear,

Thanks for the heads-up on the free week at Elliot Wave International. I think of Prechter and Roach (of Morgan Stanley) as being in the same category: very smart permabears who can provide valuable insights even if their opinion turns out to be wrong. And, I like Elliot Wave International's willingness to call a move in the market, even if they are risking being wrong.
 
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